Integrating Project Management into a Six Sigma System

Many financial institutions share a drive to lower costs, reduce cycle time and offer a diverse product mix as they pursue higher profits and an increased market share in a growing financial environment. Consumers, those paying for the end product, want products or services that are cheaper, readily available and of a quality that meets their expectations.

A variety of systems – such as total quality management (TQM), total quality control and Six Sigma – have been implemented by organisations to help guide the efforts of creating new products, reducing product costs, improving manufacturing or organisational capabilities, realising new market share or entering new markets. These systems rely on teams of people to identify the voice of the customer (both internal and external), taking into account the organization’s competencies. They also require an ongoing portfolio of projects aimed at creating revenue or reducing costs.

While not all organizations implement these systems or keep them in their original form, many of the core ideas are adopted. Some organizations have integrated two or more systems. One melding of systems that holds significant promise is the integration of the Six Sigma methodology with the tools and processes of project management.

The Six Sigma methodology DMAIC offers a structured and disciplined process for solving business problems. Six Sigma uses tools designed to identify root causes for the defects in processes that keep an organization from providing its customers with the consitent quality of products the customers require on time and at the most reasonable cost. The Six Sigma work is normally done through cross-function teams that manage the project. Yet the methodology does not address the management of the project itself.

Project management’s tools and techniques focus on attributes of a project such as development, execution, control and closing. There is an assortment of tools that are used throughout the project to manage the project to completion.

Six Sigma and Project Management

With Six Sigma’s DMAIC process, a problem is first defined and quantified. Then measurement data is collected to bound and clarify the problem. Analytical tools are deployed to trace the problem to the root cause. Solution for the root cause is identified and implemented and finally, the improved operations are subjected to ongoing control to prevent recurrence. The Six Sigma toolkit includes a variety of techniques, primarily from statistical data analysis and quality improvement. Design of experiments (DOE), failure mode and effects analysis (FMEA), cause-and-effect diagram (aka fishbone diagram, Ishikawa diagram) and process flow diagram are among Six Sigma’s many tools.

The DMAIC approach focuses on controls for the improvements to the process, not the control of the project management process.

By taking the process control strength of project management and combining it with the troubleshooting strength of Six Sigma, an organisation can create a consistent, controlled and predictable process troubleshooting system. The integration can begin with the development of a project life cycle. Implementing the Six Sigma methodology for defining the problem adds statistical knowledge of the problem, reducing the chance of an incorrect assessment of the issue as defined by the customer and scope documents. Using Six Sigma tools will reduce the bias that influences perceptions about a particular problem.As organisations continue to look for ways to improve their systems, cut costs and develop new products for the benefit of profit, project systems will be continually refined. The integration of project management and Six Sigma is a natural fit. This integrated approach will better define ways to accomplish cost reduction, process enhancement, faster implementation and new product development. The integration of the Six Sigma methodology and project management yields an approach that can be used for both transactional and financial organisations to better understand the problems and opportunities that lie ahead.